Hopefully This Is The Final Rebalancing Of My Portfolio

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Back in April 2024, I tried to rebalance my portfolio for the first time to lower the weightage of the REITs and increase exposure to the banks specifically.  It was a partially successful attempt where I only managed to add fewer number of shares of Development Bank of Singapore (DBS) and United Overseas Bank (UOB) into my portfolio than I would like to have.  As such, when the opportunity presented itself in August 2024 during the Yen carry trade "mini-crisis", I managed to add more shares of DBS and UOB into my portfolio by reducing the number of Hong Leong Finance (HLF) shares in my portfolio.  However, the percentage of REITs in my portfolio remained high and I was waiting for another chance to rebalance (55.6% SG REITs, 34.9% SG non-REITs and 9.5% US Growth based capital injected).  In fact, September 2024 actually presented a very good opportunity for me to rebalance as prices of REITs recovered greatly, but guess what?  Greed prevailed and nothing happened.

Well, I only have myself to blame.  So in this new year, I decided to do what I needed to do, and bite whatever bullet I have to, to prepare myself for the year ahead.  So here are the rebalancing trades I have done.  All proceeds from the sale are used to buy more shares of companies that are already in my portfolio, so I did not add any new companies at all.

Shares that I sold:

Frasers Logistics and Commercial Trust (FLCT): sold about 25% of my existing shares

Mapletree Industrial Trust (MIT): sold about 20% of my existing shares

Mapletree Logistics Trust (MLT): sold about 20% of my existing shares

Mapletree Pan Asia Commercial Trust (MPACT): sold about 20% of my existing shares

ParkwayLife REIT (PWLR): sold about 20% of my existing shares

My reasons for the sale:

FLCT, MLT and MPACT are underperforming for the longest time, mainly due to the weakening foreign currencies against Singapore dollar and the weak economic environment in China and Hong Kong.  The longer than expected higher interest rate environment definitely add salt to the wound.  Consequently, the logistics sector seemed to be facing challenges due to slowdown in global trade possibly due to trade wars, while commercial buildings also faced more intense competition and lower occupancy rates, especially in the West where work from home gained much popularity after the pandemic.  Although that may improve moving forward as more companies are "threatening" their staffs to return to offices, it may take time for occupancy rates to improve for commercial properties.  However, I also understand that moving forward, interest rates may slowly and gradually decline, which is beneficial to REITs in the longer term but I have no crystal ball to foresee the future, thus it is best if I reduce my exposure to a comfortable level now.  

For PWLR and MIT, both are my top 2 REIT holdings in my portfolio.  I have high conviction in both of them, as such their allocation in my portfolio is close to 10% by market value.  However, I still decided to reduce their allocations to a more comfortable level.  Specifically for PWLR, I am concerned about the potential massive earthquake caused by Nankai Trough.  As earthquakes occur in cycles, scientists and the Japanese government have warned that there is an 80% chance of a magnitude 8 to 9 earthquake happening in the next 30 years.  30 years is a long time, and I have no idea when it will occur, but this is exacerbated by the higher than usual frequency of earthquakes in the region around Japan and Taiwan since 2024.  What I do know is that if the megaquake does happen, the outcome will be devastating and it will be detrimental to the properties that PWLR owned (and the newly acquired data center in Osaka by MIT) in Japan.  Even though the buildings have been insured, but the extent of possible damage and extent of insurance remains unknown, therefore, based on the potential risk, I will feel more comfortable lowering my allocation to PWLR and MIT.

Shares that I bought with the proceeds:

CapitaLand Ascott Trust (CLAST)

ComfortDelgro (CDG)

Development Bank of Singapore (DBS)

United Overseas Bank (UOB)

That is all my rebalancing move for now, at least for the rest of 2025.  These shares were added as they were only newly added into my portfolio in 2024, thus currently comprised of a rather small percentage within the portfolio.  The reasons for adding DBS and UOB into my portfolio should be quite obvious, while the reasons for adding CLAST and CDG were explained in earlier posts.  Therefore I think it will be good to increase their allocation and enjoy their dividend payouts in time to come.  After this rebalancing, the allocation to the various sector in my portfolio will currently be (based on capital injected):

SG Dividend Portfolio: 90.6% (48.0% REITs and 42.6% Non-REITs)

US Growth Portfolio: 9.4%

After this, I can finally sit back, relax, and wait for the incoming dividends for the year 2025.  Barista FIRE, here I come...!

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